Gone are the days when buying cars from dealerships and showrooms was the only way. Today, second-hand cars have become an industry of their own, where you can get value-for-money deals on your dream cars. Whether you are on a tight budget or prefer a car with an older style, a second-hand car is a better option than buying a brand-new vehicle.
However, as good as it sounds, buying such cars can also become a nightmare if you don’t know what you’re doing. More often than not, estimating the right price for a second-hand car is the trickiest part. But there is no need to worry. This blog will help you understand the used car’s valuation process from head to toe.
To avert the risks of paying wrong prices when buying a second-hand vehicle, you must know the workarounds of used car valuation. Dealers or owners can often ask for the wrong amounts to gain ill-profits, but if you know how to find the valuation, they won’t be able to fool you. Today, there are many online sites and free tools that can help you find an old car valuation very quickly. However, if you don’t have those at your disposal, keep these things in mind to estimate the proper valuation –
1. The car’s age
The primary car valuation factor behind every second-hand car valuation is its age. A car is an asset but a depreciating one. A car’s value drops the moment it is purchased and with every year, it depreciates even further, also known as ‘age-wise depreciation’. Depending on the model, variant, make, and various other supply-demand factors, the car’s value keeps decreasing year after another. Hence, the lesser the car’s age, the lower its depreciation will be, and the higher its value.
2. The distance it’s been driven
Another important factor for finding a second-hand car’s value is the amount it’s been driven. The more you drive a car, the more wear and tear it goes through. That is why more car dealerships offer service based on distance travelled, not time period.
When calculating a second-hand car’s price, a look at the odometer, which measures the total distance the vehicle has been driven, will do this job. Usually, a car that has already been driven a lot may have many underlying issues in the engine, transmission, and other parts of the car. So, it will attract lower prices rather than one that has just completed a few kilometres.
If the second-hand car’s valuation seems too good to miss out on, it is vital to get the exact kilometres it has travelled. Otherwise, whatever amount you save on purchasing a used car, you may lose more in maintenance costs.
Additional Read: Top Benefits of Buying a Second-Hand Car in India
3. Insurance is key
Another key factor that affects a used car’s valuation is insurance. So, before you decide to buy a used car or apply for a used car loan, first confirm if it is insured or not. Usually, insured cars get higher sale values, which is why many often get third-party insurance.
On the other hand, if a car’s insurance isn’t renewed when it’s about to be sold, it will fetch lower prices. So, keep an eye out for the car insurance to determine whether you are really getting a deal or paying higher than the car’s valuation.
4. Proper maintenance and good condition
Needless to say, a well-maintained car will always attract more eyeballs. A used car that has been serviced, has all parts intact, and has both exterior and interior in top-notch condition will cost you more.
Hence, when calculating a second-hand car’s price, make sure that the used car is in good condition. Run a thorough check and see if the car has been regularly serviced, and parts such as the engine oil, oil filter, gear oil, air filter, etc. have been changed to be in a great condition.
5. Ownership frequency
Finally, another important factor that decides a second-hand car’s valuation is the ownership frequency, i.e., the number of owners it had before you bought it. With every sale or change of ownership, the risk of a car being in poor condition increases. As a result, the resale value of a car drops further. So, you must check the number of owners the car has had, before getting a used car.
Additional Read: Top Used Cars to Go for This 2020
6. Other factors
Besides the points mentioned above, various other factors affect an old car’s valuation. Here are some of those factors that you must also consider when buying a used car.
- Proper documentation
- Car details
- Brand and the car’s variant
- Registration year
- Demand of the used car’s model
- If brand is actively selling cars in the country and has authorized service centres
- Availability of used car’s parts
When you are in the market looking for a used car for yourself, ensure you get the intricate details right when determining a second-hand car’s price. Consider the factors mentioned above to calculate the car’s valuation, so you do not pay a penny more than the car’s actual cost.
If you have found a used car that ticks all the boxes, it is time to finance the purchase of that car. You need not look any further – Tata Capital will provide easy EMI options and attractive, used car loan interest rates. Visit the Tata Capital website to know more.